Best Stocks To Short Today As GDP Plunge Rattles Investors

This morning was filled with some dreary economic headlines. The GDP report for the second quarter came in and it was ugly (although, better than expected, if that provides any solace). A record-shattering drop in production of -32.9% annualized was reported for the quarter, besting the Great Depression, the Great Recession, and every period over the last two centuries for a quarterly contraction. Economists surveyed expected a drop of 34.7%, so it wasn’t all bad… The previous record was from 1921 Q2, where the annualized drop came in at 28.8%. On top of the report, we also had the weekly jobless claims, which came in around expectations at 1.434 million. Continuing claims jumped to over 17 million, underscoring the economic pain that is happening across the country right now, especially as covid cases continue to rise. The reaction in the stock markets was uniformly negative, with the Dow dropping over 500 points at one time this morning. If you think more pain is ahead, our deep learning algorithms paired with Artificial Intelligence (“AI”) technology has you covered with the Top Shorts for today.

Sign up for the free Forbes AI Investor newsletter here to join an exclusive AI investing community and get premium investing ideas before markets open.

Keycorp (KEY)

First on the Top Shorts list today is Keycorp with factor scores from our AI systems of D in Technical, D in Growth, D in Momentum Volatility, and D in Quality Value for the stock that has lost 38.01% for the year already. The regional bank has assets over $145 billion, and Ohio-based KeyCorp KEY ‘s bank footprint spans 16 states. It is, however, predominantly concentrated in its two largest markets: Ohio and New York. KeyCorp is primarily focused on serving middle-market commercial clients through a hybrid community/corporate bank model. Revenue was $5923.0M in the last fiscal year compared to $6026.0M three years ago. Operating Income was $2205.0M in the last fiscal year versus $2116.0M three years ago. EPS was $1.62 in the last fiscal year, better than the $1.13 three years ago. ROE was 10.47% in the last year in comparison to 8.53% three years ago. Forward 12M Revenue is expected to grow by 0.48% and the stock trades with a forward 12M P/E of 10.69.

Recommended For You

MGM Resorts International (MGM)

Next on the Top Shorts list is one to bet against, MGM Resorts International. Our deep learning algorithms have identified factor scores of C in Technical, F in Growth, D in Momentum Volatility, and F in Quality Value for the stock that has lost 51.72% for the year already. The company is the largest resort operator on the Las Vegas Strip with 35,000 guest rooms and suites, representing about one fourth of all units in the market. The company’s Vegas properties include MGM Grand, Mandalay Bay, Mirage, Luxor, New York-New York, and a 50% ownership stake in CityCenter. However, with a pandemic raging in the US, there isn’t much hope for a crowded casino floor in the near future. Revenue grew by 11.13% over the last three fiscal years to $12462.78M in the last fiscal, compared to $10395.44M three years ago. EPS grew by 41.2% in the last fiscal year to $3.88 and grew by 63.93% over the last three fiscal years from $3.34 three years ago. Operating Income was $1418.5M in the last fiscal year versus $1575.96M three years ago. ROE was 18.97% in the last year, which compares to 19.23% three years ago. Forward 12M revenue is expected to grow by 0.38%.

Marathon Oil Corp (MRO)

An oil and gas company is next on the Top Shorts list in Marathon Oil Corp MRO , with AI-based factor scores of D in Technical, D in Growth, D in Momentum Volatility, and D in Quality Value. The company is an independent exploration and production company primarily focusing on unconventional resources in the United States. At the end of 2019, the company reported net proved reserves of 1.2 billion barrels of oil equivalent. The stock, however, has lost 58.04% for the year already and the momentum is carrying to the downside. Revenue grew by 9.67% over the last three fiscal years to $5125.0M in the last fiscal, which compares to $4487.0M three years ago. Operating Income grew by 17.93% in the last fiscal year to $502.0M, and grew by -232.44% over the last three fiscal years from $(447.0)M three years ago. EPS grew by -104.77% over the last three fiscal years to $0.59 in the last fiscal, which compares to $(6.73) three years ago. ROE was 3.95% in the last year versus compares to (5.68%) three years ago.

New York Mortgage Trust Inc (NYMT)

Next on the Top Shorts list is New York Mortgage Trust Inc, a mortgage REIT in the business of acquiring, investing in, financing, and managing mortgage-related and residential housing-related assets. The company’s investment portfolio consists of Structured multi-family property investments such as multi-family CMBS, and preferred equity in, and mezzanine loans to, owners of multi-family properties. Our AI systems have identified factor scores of C in Technical, D in Growth, F in Momentum Volatility, and D in Quality Value for the stock that has lost 56.27% for the year. Revenue was $225.46M in the last fiscal year compared to $133.0M three years ago. Operating Income was $175.63M in the last fiscal year versus $91.92M three years ago. EPS was $0.64 in the last fiscal year, which compares to $0.66 three years ago. ROE was 10.21% in the last year, a little better than the 9.69% three years ago. The stock is currently trading with a forward 12M P/E of 10.7.

Tiffany & Co (TIF)

Our final Top Short today is Tiffany & Co TIF , the luxury goods jeweler with a 180-year history. The company is vertically integrated, with around 60% of jewellery produced internally. Tiffany is present in over 20 countries globally, with over 300 own stores. Its biggest market is its home market, the U.S.; however, Europe and Asia-Pacific have shown the strongest growth in recent years. With a recession firmly in place in many countries across the globe, luxury brands may take a hit, which is showing up in the stock price this year being down 6.69% so far despite a buyout offer in late 2019. Our AI systems have identified factor scores of F in Technical, D in Growth, C in Momentum Volatility, and D in Quality Value. As for the financials, revenue was $4424.0M in the last fiscal year, compared to $4169.8M three years ago. Operating Income was $744.0M in the last fiscal year versus $804.5M three years ago. EPS was $4.45 in the last fiscal year, which compares to $2.96 three years ago. ROE was 16.74% in the last year, better than the 11.79% three years ago. Forward 12M revenue is expected to grow by 7.72% and the stock is trading with a forward 12M P/E of 47.19.

Liked what you read? Sign up for our free Forbes AI Investor Newsletter here to get AI driven investing ideas weekly. For a limited time, subscribers can join an exclusive slack group to get these ideas before markets open.

Comments are closed.